Reeves warning on auto-enrolment waiting period

Speaking to schemeXpert.com , Reeves said she was worried the delay in enrolling would hit women and low earning, temporary workers the hardest.

Reeves also dismissed fears the costs of the reforms would damage small businesses and force them to lay off staff.

The former Bank of England economist said: “The great thing about enrolling on day one is nobody ever notices the reduction in their income.

“I am worried it will cause people to opt out of it. My second worry is for people who change jobs – low income workers especially do tend to move around a lot, especially with temporary and agency work. As a result they won’t be saving for the future.”

The shadow minister said the coalition’s “tinkering” with auto-enrolment’s start date unravelled the holistic approach of the Turner report, which she emphasised had reached consensus.

She said instead, enrolment should start from day one to encourage saving.

On costs to businesses, she added: “If we start excluding businesses from auto-enrolment, around only half the people who were going to benefit would benefit.”

Such exclusion would be unfair on larger businesses and detrimental for future business growth, she said, concluding small businesses must be included for reform to work.

On raising employer contribution limit from £5,035 to £7,500, Reeves said she was particularly concerned about the one million women excluded. The changes would exempt and discourage people the scheme was designed to reach, she stressed.
 
Discussing the government’s proposal for a citizens’ pension, she said: “It has become something of an embarrassment for the government now, as it was announced in the press with little comment, detail or discussion.

“I think pensioners need more detail on these plans – hopefully we’ll be getting a green paper in the next few weeks as I am far from convinced this will be delivered cost neutrally.”